TRANSCRIPT
Australia has always been an expensive place to live - with higher grocery, housing, and transport costs compared to similar countries.
That high cost of living has come with some advantages - like higher wages, and quality of life.
Over the past four years, that balance has started to slip.
Cost of living is the number one issue for most Australians - as SBS found interviewing people on the streets of the country's largest city, Sydney.
"I've found that everything is at least 20% more than it was. So I'm feeling like I'm having to really cut back on more kind of luxury type items that I would have previously bought. Well, the milk has gone up in Coles, bread has gone up, just about everything. I can't think of anything that's gone down. Insurances of course, they're always going up, that's a real killer. And I just feel like, what you get back from your health insurance is not as much as you used to get back."
Recent inflation has been blamed on the pandemic.
Undeniably, the once in a lifetime event put significant stress on supply chains
But former chair of the Australian Competition and Consumer Commission, Professor Allan Fels, says that there are other factors driving it.
"No one looks at the role of prices, price setting, profit margins in relation to inflation, and in relation to what could be done about high prices."
Today, Professor Fels released a report into price gouging and unfair pricing practices... he says that businesses have contributed to high inflation.
"The actual setting of prices by business has added quite a lot to inflation. And that's often disregarded. Other things are blamed, monetary policy, war, etc. Business prices contribute a lot to inflation."
Andrew McKellar, Chief Executive of the Australian Chamber of Commerce and Industry, denies businesses have been taking advantage of Australians.
"Not at all. Look it's a very very difficult trading environemnt. Not only has the cost of living has been rising but the cost of doing business has been rising, and none more so than small business. I think really here, this is a problem across the whole of the economy. We are starting to see inflation coming down. But there are fundamental reforms that have to be undertaken if we are going to make it easier for business to operate in the future and to take inflation out of the economy."
Mr McKellar says he doubts the report's merit.
"I think we are very skeptical about the report that's been produced in its recommendations. Honestly, I think this was something that was predetermined by the union movement to put the worst possible light on business. So we don't put a great deal of stock in what's been put forward."
Professor Fels says that Australia's economic policy has allowed unfair pricing practices to occur.
"It's been a history until recent epochs of letting monopolies emerge and letting mergers go through. Also, we don't have the power to break up big business unlike in the US. We don't have a power to regulat prices."
He says that the federal government needs to take action to protect consumers.
"It needs to make a high priority of the process. There's a lot of things I can do without having price controls. And on top of that, they need to strengthen the competition policy, a tougher merger law and also do something about governments themselves, taking actions that put up prices."
In a statement, the Australian Competition and Consumer Commision says that they will review with interest the report’s wide-ranging contributions to important economic policy issues.
